Equity Research firm Oppenheimer issued a note to investors this morning, upgrading their stance on Baidu Inc (ADR) (NASDAQ:BIDU) from Perform to Outperform and a 12-18 month price target of $280.
“We think recent market correction provides a great entry opportunity for BIDU: one of the largest Chinese Internet companies, with its leading market share in search well maintained and new initiatives well planned to remain as a top performer in the industry. Our raised 2014-2016 top- and bottom-line estimates suggest 40%+ CAGR in the next two years, even on a large base as BIDU will likely exceed $10B revenue in 2015.”
Among other factors, Oppenheimer sees stable search market share ahead as well as their Baidu connect product.
“The recently launched Baidu Connect aims to bridge LBS search demands directly with merchants. The e-commerce JV with Tencent/ Wanda also seeks to take advantage of BIDU’s vast search traffic. BIDU also actively promoted its Nuomi and Baidu Wallet. We expect more upside in mobile monetization as its ecosystem ramps up over time.”
Stock Performance
Taking a look at the company’s recent performance, Baidu Inc (ADR)(NASDAQ:BIDU) reported second quarter earnings for fiscal 2014 on July 24th. The company reported actual earnings per share of $1.73 against the consensus Street estimate of $8.15. This represents year over year growth of 37%. Baidu posted revenue of $1.93 billion against estimates of $11.95 billion. Baidu is currently valued at $70.01 billion and closed the last trading session at $199.68. The stock has a 50-day moving average of $218.87 and a 200-day moving average of $183.99.
Is this a Buying Opportunity?
There are currently Eighteen analysts that we track that cover the stock. Of those eighteen, all have a Buy rating. On a consensus basis this yields a score of 3.00 and a Buy. The combined price objective of these covering analysts is $234.77, which represents a 7.91% difference to the last closing price. The most recent analyst activity consisted of Morgan Stanley reiterating their Positive stance on the company. On the date of the report, the stock closed at $224.20.
Another research firm weighing in recently was Zacks who upgraded their rating on the stock. On August 18thZacks upgraded their price target on the stock $227.50, or a 3.9% upside to the current price. On the day of the report, BIDU shares closed at $219.24.
Company Profile
Baidu Inc (ADR)(NASDAQ:BIDU) provides Internet search services. The company offers a Chinese language search platform on its Baidu.com Website that enables users to find relevant information online, including Web pages, news, images, documents, and multimedia files, through links provided on its Website; and various international products and services in local languages to users in other countries. It also provides search products and Web Directory; music products; social-networking products; UGC-based knowledge products; location-based products and services; entertainment products; security products; mobile related products and services; products and services for developers and Webmasters; Web, image, and video search services; other products and services provided by its associated or cooperative websites; and other products and services. In addition, the company offers online marketing services based on search queries, contextuals, audience attributes, display placements, and other forms; and branding display marketing services, and auction-based P4P services.
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